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Oil traders leave Noble Group, three join Glencore - sources

Published 12/05/2016, 03:25
Updated 12/05/2016, 03:30
© Reuters. The company logo of Noble Group is displayed at its office in Hong Kong
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LONDON/SINGAPORE (Reuters) - Five oil product traders have resigned from Noble Group (SI:NOBG), Asia's biggest commodity trader by revenue, some of whom are moving to rival trader Glencore (L:GLEN), sources with knowledge of the issue said.

Three of Noble's London-based gasoline traders are joining Glencore, according to the sources. The status of two other traders was not immediately clear.

Noble had also subleased storage tanks in the key Amsterdam-Rotterdam-Antwerp area to another competitor, trading house Gunvor (GGL.UL), another source said.

Noble, Glencore and Gunvor declined to comment.

The shake up comes ahead of Noble reporting its first-quarter results on Thursday, and as the commodity trader negotiates for around $3 billion of credit with banks, as some existing loans mature in May.

Funding is a life-blood of commodities trading, with Noble's rivals such as Vitol [VITOLV.UL] or Trafigura [TRAFG.UL] also holding open credit lines worth billions of dollars with banks to perform trading on a large scale.

Noble's refinancing talks have been complicated by credit ratings agencies downgrading the company's ratings to junk in the past five months, making loans more expensive.

The departure of traders is likely to be a setback for the Singapore-based commodity merchant, which has said that its oil and refined products business is one of its most significant trading segments, and a sector it wanted to expand in.

When Noble announced its first annual loss in nearly 20 years in February, it had said the recent ramp up in oil liquids had made that business its single largest profit contributor in 2015.

The company's shares have shed more than two-thirds of their value since Iceberg Research in February 2015 accused Noble of inflating its assets by billions of dollars by inaccurately representing the value of its contracts. Noble has rejected the claims.

© Reuters. The company logo of Noble Group is displayed at its office in Hong Kong

The Financial Times had earlier reported the departure of some gasoline traders from Noble.

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